Any banker, trader or investor asked to invent the perfect market environment for creating wealth beyond the wildest dreams of avarice would come up with conditions akin to those of the past decade. So what went wrong?

The financial community, through greed, stupidity and hubris, has fouled its own sandpit. The era of munificent money- making conditions -- gentle regulation, ever-faster information flows, freely available credit, unprecedented access to global investors and oil-enriched buyers of anything yielding north of zero -- is ending with an almighty bang, not a whimper.

Since its inception, the derivatives market has echoed the fairground hawker's call to ``scream if you want to go faster.'' Every time Microsoft Corp. upgraded its Excel spreadsheet software to accommodate more cells, rows and columns, the structured finance guys were able to graft yet more layers of complexity onto their products.

The U.S. bond insurers exemplify the gluttony of recent years. Few financing techniques could be duller than guaranteeing municipal bonds. It turns out the so-called monolines found it as boring as you might expect, and decided to spice up their lives - - and their fee income -- with a little derivatives action on the side, to the tune of about $100 billion in collateralized debt pledges.

Failing Grades

As a result, some $2.4 trillion of debt carrying the imprimatur of the seven biggest bond insurers may lose the AAA grade as the rating companies start to downgrade the monolines. One, Ambac Financial Group Inc., was cut by two levels to AA by Fitch Ratings last week, threatening the value of the $556 billion of debt it insures.

Tim Price, the investment director at PFP Wealth Management in London, reckons the financial community has ``behaved as if untethered by any moral or social accountability,'' potentially sowing the seeds of its own demise.

``It would be ironic if, just when capitalism seemed to have won the global battle for consumer hearts and minds, its venal banking sector had sown the seeds for its own destruction and replacement by a newly resurgent spirit of socialism and protectionism,'' Price wrote in a research report last week.

`Government Intervention'

Bernard Connolly, the chief global strategist at American International Group's Banque AIG unit in London, goes further. ``The global capitalist system is now at risk of collapsing; it could not easily withstand a stock market crash coming after an implosion of the credit bubble,'' he wrote in a Jan. 21 research note. ``We hate the idea of extensive government intervention. But it is going to come.''

In a sense, part of Connolly's nightmare is already starting to come true. The cash infusions by sovereign wealth funds from Asia and the Middle East put chunks of the capitalist world's economic assets into government ownership in a kind of back-door nationalization.

What's missing from the current market prognosis is a sense of contrition or remorse, any reflection that ``maybe we should have done things differently.'' A Martian eavesdropping on locker-room conversations in the financial district would get the impression that stock markets are getting trashed because of a perfect storm of bad luck, the unexpected arrival of black swans, with millions of victims and zero perpetrators.

Handcuffs and Straitjackets

Moreover, the culprits seem entirely oblivious to the possibility that by the time the smoke clears, governments and regulators might have slapped the financial markets in handcuffs and straitjackets -- especially if millions of U.S. baby boomers see their retirement savings wiped out in a stock market crash.

Banks may be obliged to hoard more capital for a rainy day, crimping their ability to make loans. The dead hand of regulation may drop onto the shoulders of the hedge funds, forcing them to reveal details of their trading strategies and holdings. Central banks will want to reconsider how they play their lender-of-last- resort role when liquidity evaporates. Moreover, while its reputation was stained by the debacles of Enron Corp., WorldCom Inc., Parmalat Finanziaria SpA, the dot- com bust and the inability of its cheerleading equity analysts to advise investors to do anything other than buy stocks, the financial community escaped sanction for the most part. This time, its luck may have run out.

Top financial questions asked and the answers given by real people on Yahoo! Answers

Why should taxpayers be responsible for bailing out all of these sub-prime mortgage loans?
Asked by
Danny
Best Answer
There is absolutely no reason why our tax money should go to bailing out corporations.
Let the system of Capitalism we have work itself out.
That's the great thing about Capitalism...it's self correcting.
If these companies go out of business becuase of decisions made by the management- so be it.
They wont be around in the future. Just ask Country Wide...after BofA completes their purchase...CountryWide will be no more.
Answered by
Mike H

Rome was lower culture than Greece and she subjected Greece, Hun and Ostrogots won Rome, thoughts they had less complex culture in that time, China lost war to Mongolia etc, etc.
I would suggest the statement rather to contrary
The global elite have built plans to China to do a job for them, and this stays as plans.

MEDVEDEV WANTS WORLD ROLE FOR RUSSIAN FILM STUDIO
Presidential candidate and First Deputy Prime Minister Medvedev said in St. Petersburg on January 27 that Russia's Lenfilm studios must become a world leader, The government recently decided to "suspend" the process of privatizing the studios,!

Originally posted by woj1@cyberonic. Top financial questions asked and the answers given by real people on Yahoo! Answers

Why should taxpayers be responsible for bailing out all of these sub-prime mortgage loans?Asked by Danny Best AnswerThere is absolutely no reason why our tax money should go to bailing out corporations. Let the system of Capitalism we have work itself out. That's the great thing about Capitalism...it's self correcting. If these companies go out of business becuase of decisions made by the management- so be it. They wont be around in the future. Just ask Country Wide...after BofA completes their purchase...CountryWide will be no more.Answered by Mike H

Losses jobs for Americans, is result of globalization , introduced by president Clinton in USA. It is main reason of poor economical situation.
If one think that situation will be healthy because the money received by banks from refinancing, one should twice.

Aircraft carrier Admiral Kuznetsov. Russia wrapped up its 12-day joint exercise between its Air Force and Navy in the Atlantic and Arctic oceans Saturday, arousing concerns from NATO members and other western .

This is the first large-scale overseas drill by Russian fleets and aircraft since the end of the Cold War, which shows the country's military strength.

The exercise came when Russia has toughened its stance in dealing with the West and the expansion of NATO.

The war game involved the Soviet-era aircraft carrier Admiral Kuznetsov, flagship of the Black Sea Fleet the Moskva cruiser, anti-submarine ships and dozens of strategic bombers, fighter jets and airborne warning and control planes.
Moscow said there's no need for NATO -- the U.S.-led military bloc that once rivals the Soviet Union -- to enroll new members in Eastern Europe since the Cold War has already ended. Since Moscow's diplomatic efforts, including talks between Foreign Minister Sergei Lavrov and his U.S. counterpart Condoleezza Rice and defense ministers from the two nations last year, failed to haul the U.S. plans, Russian military's voice has grown stronger. Nikolai Solovtsov, commander of the Strategic Rocket Forces, said last December that Russia's strategic missiles are capable of passing through any existing and prospective missile defense systems, including the one proposed by the United States for Eastern Europe. Solovtsov made the remark when Russia made several test-fires of inter-continental ballistic missiles and issued the layouts of submarines deployment, missiles and anti-missile systems deployment in the country. Yuri Baluyevsky, chief of the Armed Forces, said in mid-January that Russia may use nuclear weapons pre-emptively if under serious threat..

The Democrats award about 3,000 of their convention delegates to the states based on their vote in the Electoral College and on how many popular votes they and their congressional districts gave to the party's presidential candidates in the past three elections.

By party rule, three-quarters of each state's delegates must be elected proportionately by district -- that is, the candidate who wins 60% of the popular vote in a congressional district gets 60% of its delegates. Another quarter of the delegates are awarded proportionately statewide.

In Arizona, for example, 37 of the state's 56 delegates will be awarded today based on district voting and 12 based on statewide voting.

The Democrats award another 15% of delegate votes to local party leaders and elected officials, or PLEOs. Those delegates also are awarded based on each candidate's statewide vote, and like other delegates awarded proportionately, they are "pledged" to vote for their candidate. In Arizona, that is another seven delegates.

The Democrats haven't changed the complicated rules by which they choose their convention delegates -- and therefore their presidential nominee -- in a generation. It is just that this year, everyone is paying attention.

The Republicans' fairly straightforward delegate-selection rules mean that the party's nominee could be decided in today's primaries.
Of 1,191 votes needed to win the Republican nomination, 964 are at stake today, and one-third of those are in states where the candidate who gets the most votes will win all of the state's delegates.